A proposed 278-mile rail line billed as relief for freight and traffic congestion in the Chicago area is getting a hearing next month from a federal regulator, even as one potential customer said it's not interested.

The Surface Transportation Board, an arm of the U.S. Department of Transportation, has scheduled public meetings in April to get input on the three-state proposal, partly due to its potential for "significant environmental impacts."

Its developer, Great Lakes Basin Transportation, hasn't publicly divulged its funding sources, but said it envisions the privately financed freight rail project to run in relatively sparsely populated areas from near La Porte, Ind., to Milton, Wis., and to connect with existing major railroads.

The proposed $8 billion rail line would enable freight traffic not destined for, or originating in, Chicago to bypass a Chicago terminal area characterized as "congested" in a Surface Transportation Board notice that appeared in the Federal Register on Friday. Freight transit times through the Chicago area could be reduced from as long as 30 hours to as little as 8 hours, Great Lakes says.

That, in turn, could also provide relief to suburban commuters both in cars and on passenger trains as more freight trains bypass the downtown area, said Great Lakes founder and managing partner Frank Patton.

Great Lakes said its project would provide major railroads — including BNSF Railway, Union Pacific, Norfolk Southern and CSX — "more efficient options to route trains through the city."

The Illinois Department of Transportation had no immediate comment on the proposed project, which Patton has discussed for years.

But Union Pacific said Monday that, "after carefully reviewing the proposal, Union Pacific determined in July 2014 that it was not interested in moving forward with a discussion on the Great Lakes Basin Railroad's bypass project."

Tribune data visuals

Tribune data visuals

"We have repeatedly communicated this position to Great Lakes Basin's leadership team," Union Pacific spokeswoman Calli Hite said. "Union Pacific is focused on several major public-private partnerships, including CREATE, which will benefit the region and enhance efficiency for Chicago-area and regional railroad operations."

CREATE, or the Chicago Region Environmental and Transportation Efficiency program, is a partnership between the U.S. Department of Transportation, the state of Illinois, the city of Chicago, Metra, Amtrak and the nation's freight railroads to improve rail line efficiency.

The proposed Great Lakes project would typically consist of two tracks and allow for movements of up to 110 trains a day and could cause the closure of some small rural roads, according to the Surface Transportation Board notice.

Great Lakes said its route would include flyovers, or overpasses, over existing rail lines that it encounters so neither train must wait for the other. "By doing that you eliminate what is now a huge amount of the congestion in the Chicago terminal," said Patton, a former Union League Club of Chicago president and a former software company owner.

The Surface Transportation Board said it will prepare an "environmental impact statement" and, as part of the process, hold eight hearings, including April 11 in Manteno, April 19 in Rockford, April 20 in Rochelle and April 21 in Seneca.

Manteno Mayor Tim Nugent called the Great Lakes project "quite a grandiose undertaking" and said railroads need the line.

"They've got the Surface Transportation Board involved, which is the next step," said Nugent, who plans to attend the April 11 hearing.

Great Lakes' Patton said the estimated tab for the project, which has 14 investors he declined to name, is about $8 billion.

Great Lakes estimates 15 percent to 25 percent of freight traffic doesn't start or end in Chicago, yet must fight its way through a crowded terminal area that also must accommodate Metra and Amtrak passenger trains.

Joseph Schwieterman, director of the Chaddick Institute for Metropolitan Development at DePaul University, said the proposed freight rail project would be "good news for shippers looking to one day avoid the traffic entanglement that our city has become."

"We have almost forgotten in this country how to build new lines for freight movements," Schwieterman said.

The Chicago area "simply won't have enough rail capacity to handle all the projected traffic growth," he said. "This problem is putting wind in the sails of this project's supporters."

Schwieterman said there's enough undeveloped land "around the periphery of our region to build this line with relatively little demolition required."

Funding will be a key factor in whether the project comes to fruition. "A strong coalition has been put together," said P.S. Sriraj, interim executive director of the Urban Transportation Center at the University of Illinois at Chicago, who has seen the proposal. "It seems like they've done their homework about the need and feasibility of it."

Great Lakes' plans, according to the Surface Transportation Board, include building a terminal near Manteno that would provide switching, servicing, and car and locomotive repair.

The environmental study is expected to take 18 months to 36 months, Patton said.

The board's environmental impact statement will analyze the potential impacts of construction and operation, including for alternative routes. The board could deny Great Lakes' petition or application to build.

Receiving a permit to build alone would cost $30 million to $50 million, Patton said.

To acquire the land, property owners would be offered the equivalent of $20,000 an acre, receive free residential electricity, and receive access to the rail if they have, say, grain to ship, Patton said.

A version of this article appeared in print on March 22, 2016, in the Business section of the Chicago Tribune with the headline "Congestion-easing rail makes tracks - Feds seek input on $8B project; Union Pacific not on board" —
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